OPEC pops the question – will Russia say ‘I do’?

OPEC is drafting an agreement to tie Russia into a so-called “super group” of oil producers. Details on the proposal are vague and the Kremlin’s willingness to consider such a betrothal is uncertain, despite some positive vibes between Russia and OPEC kingpin Saudi Arabia at the moment. In trying to formalize a permanent marriage to a powerful but unpredictable partner like Vladimir Putin, OPEC Secretary General Mohammed Barkindo is no doubt aware of the stakes of a divorce. Any end to the production cut pact is likely to be messy with several countries having touted in recent weeks their plans to boost their production capacity in short order. And for Saudi Arabia, it is counting on keeping Russia on side as its highly anticipated public listing of state oil company Aramco looks to be delayed. Talk of the super group “pushes away the conversation that [OPEC] wants to be avoided: what is the exit strategy?” noted veteran OPEC watcher Jamie Webster, senior director at Boston Consulting Group’s Center for Energy Impact. As the oil market has tightened, OPEC and its allies have remained coy on outlining how they plan to exit their output cut deal, save some vague pledges not… continue reading

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